This is the first installment in a series leading up to the publication of Fateful Decisions.

China has tremendous resources, both human and financial, but it may now be facing a perfect storm of challenges. Its future is neither inevitable nor immutable, and its further evolution will be highly contingent on the content and efficacy of complex policy choices.

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One of these challenges — how China must soon achieve economic growth as it grapples with the realities of a rapidly aging population and a shrinking workforce — is the subject of a chapter authored by Karen Eggleston, the deputy director of APARC and director of the Center’s Asia Health Policy Program. In the following interview, Eggleston shares perspectives from her chapter, “Demographic Challenges.”

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Q: What are some of the fateful decisions China is facing regarding the responsibilities of caring for a large, aging population?

A: China has achieved impressive improvements in health and longevity. It has implemented universal health coverage and is experimenting with financial support for long-term care for older adults. Yet significant gaps between the most- and least-privileged Chinese citizens persist, and in some cases are growing. As I have written elsewhere, it is not surprising that there are wide disparities in health and healthcare between different population subgroups in a country as populous, expansive, and diverse as China. How effectively and efficiently China meets these and other health- and aging-related issues will have a major impact on its ability to manage other social and economic challenges.

In the chapter I contributed to the volume Fateful Decisions, I note that China’s current population and demographic trends — including relatively rapid aging — reflect the success of earlier investments in infectious disease control, public health measures, and other contributors to mortality reduction. The lingering effects of family planning policies, historic preferences for sons, and rapid economic development are also major considerations. Together, these factors have produced a shrinking working-age population, a growing number of elderly, a gender imbalance, and hurdles for inclusive urbanization. An urgent question for China’s future is to what extent policies will ameliorate disparities in health, healthcare use, and the burden of medical spending.

The unfolding COVID-2019 outbreak is a powerful illustration of just how fateful decisions about health systems can be. Compared to the SARS outbreak almost two decades ago, China has been better prepared for this situation. SARS raised health system reform to the top of the political agenda and, many argue, played a direct role in China’s achieving universal health coverage and vastly strengthening the public health system.

But as China has become a middle-income global economic powerhouse in the years since SARS and the ensuing wave of health policy reforms, the expectations of its citizens about their health system have also risen. Has the health system, including public health and medical care, been strengthened to the same degree as other parts of the economy and public services? The impact of and lasting response to COVID-2019 may prove a litmus test.

Q: Why do these decisions about health carry such importance for China’s future development?

Through the last four decades, China has benefitted from a demographic dividend caused by the large bulge in the working-age population. But to achieve future economic growth and productivity, investments in human capital — particularly in health and education —need to be made. This higher productivity will, in turn, be the means by which a smaller workforce can support China’s large and growing cohort of retirees.

As we’ve already seen, health expenditures have increased rapidly as China has developed its system of universal health coverage. Double-digit health spending growth surpassed the rate of economic growth, and as a result, health spending absorbs an increasingly larger share of the total economy. China needs to make sure additional spending on health and elderly care is efficient and effective, while also addressing the nonmedical determinants of health and promoting healthy aging. The health system needs to be reengineered to emphasize prevention, provide coordinated health care for people with multiple chronic diseases, assure equitable access to rapidly changing medical technologies, and ensure long-term care for frail elderly, all without unsustainable increases in opportunity costs for China’s future generations.

Q: What is the Chinese government doing to improve healthcare quality and delivery, and what more could it do to affect meaningful change in its systems?

China’s current policies seek to balance individual responsibility, community support, and taxpayer redistribution through safety-net coverage funded by central and local governments. Like many countries, China would benefit from improved coordination across multiple agencies and structure incentives to avoid or mitigate unintended consequences that undermine the goals of its health system. Recent governance reforms, such as the creation of the National Healthcare Security Administration, aim to address these challenges.

China’s achievements and remaining challenges can be illustrated with the Healthcare Access and Quality Index (HAQ), which measures premature mortality from causes that should not occur if the individual had access to high-quality healthcare: among 195 countries and territories, China achieved the highest absolute increase in the HAQ Index from 2000 to 2016. However, the 43-point regional disparity in HAQ within China is the equivalent of the difference between Iceland (the highest HAQ in the world) and North Korea.

Q: The subject of your chapter, China’s demographic challenges, is one of the issues you investigate in your upcoming book, Healthy Aging in Asia. As you show in this volume, challenges at the intersection of aging, economics, demographic transition, and healthcare policy are not unique to China. How are other countries in Asia responding to them and what lessons could benefit China?

 As I note in the introduction of Healthy Aging in Asia, the demographic transition from high to low fertility and mortality has been more rapid in much of Asia than in Europe and North America. That means social institutions, such as retirement, living arrangements, and intergenerational support, have to adapt quickly. For example, extending work-lives (as is happening in Japan) will be necessary but feasible only if the added years are healthy ones and equitable only if the least advantaged also benefit from healthy aging. The blessings of longevity dim when clouded by pain, disability, and loss of dignity.

 Investment strategies in insurance and managing chronic conditions are also important considerations. Japan and Korea have adopted insurance systems for financing long-term care for frail elderly, while places like Hong Kong have good empirical research on chronic condition management.

 No country or system has a “magic pill” to address these challenges, but the empirical evidence and rich policy experience documented in Healthy Aging from health systems as diverse as those in the cities of Singapore and Hong Kong to large economies such as Japan, India, and China can certainly be instructive.

Southeast Asia, home to over 640 million people across 10 countries, is one of the world’s most dynamic and fastest growing regions. APARC just concluded the year 2019 with a Center delegation visit to two Southeast Asian capital cities, Hanoi and Bangkok, where we spent an engaging week with stakeholders in the academic, policy, business, and Stanford alumni communities.

Led by APARC Director Gi-Wook Shin, the delegation included APARC Deputy Director and Asia Health Policy Program Director Karen Eggleston, Southeast Asia Program Director Donald Emmerson, and APARC Associate Director for Communications and External Relations Noa Ronkin. Visiting Scholar Andrew Kim joined the delegation in Bangkok.

With a focus on health policy, our first day in Hanoi included a visit to Thai Nguyen University, a meeting with government representatives at the Vietnam Ministry of Health, and a seminar on healthy aging and innovation jointly with Hanoi Medical University.

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Throughout the day, Eggleston presented some of her collaborative research that is part of two projects involving international research teams: one that assesses public-private roles and institutional innovation for healthy aging and another that examines the economics of caring for patients with chronic diseases across diverse health systems in Asia and other parts of the world. We appreciated learning from our counterparts about the health care system and health care delivery in Vietnam.

Shifting focus to international relations and regional security, day 2 in Hanoi opened with a roundtable, “The Rise of the Indo-Pacific and Vietnam-U.S. Relations,” held jointly with the East Sea Institute (ESI) of the Diplomatic Academy of Vietnam (DAV). Following a welcome by ESI Director General Nguyen Hung Son, the program continued with remarks by Shin, Emmerson, ESI Deputy Director General To Anh Tuan, and Assistant Director General Do Thanh Hai.

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The long-ranging conversation with DAV members included issues such as the future of the international order in Asia; the U.S. withdrawal from multilateralism; the concern about a lack of U.S. engagement in Southeast Asia, sparked by President Trump’s absence from the November 2019 summit of the Association of Southeast Asian Nations (ASEAN) at a time when China is bolstering its influence in the region and when ASEAN hopes to set a code of conduct with China regarding disputed waters in the South China Sea; the priorities for Vietnam as it assumes the role of ASEAN chair in 2020; and the challenges for the Vietnam-U.S. bilateral relationship amid the changing strategic environment in Southeast Asia.

In the afternoon we were joined by members of the American Chamber of Commerce in Hanoi at an AmCham-hosted Lunch ‘n’ Learn session on Vietnam's challenges and opportunities amid the U.S.-China rivalry. The event featured Emmerson in conversation with AmCham Hanoi Executive Director Adam Sitkoff.

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Moving to Bangkok, delegation members Shin, Eggleston, Emmerson, and Kim spoke on a panel for executives of the Charoen Pokphand Group (C.P. Group), one of Thailand’s largest private conglomerates, addressing some of the core issues that lie ahead for Southeast Asia in 2020 and beyond in the areas of geopolitics, innovation, and health.

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We also enjoyed a tour at True Digital Park, Thailand’s first startup and tech entrepreneur’s campus. Developed by the C.P. Group, True Digital Park aspires to be an open startup ecosystem that powers Thailand to become a global hub for digital innovation.

The following day, Shin and Emmerson participated in a public forum hosted by Chulalongkorn University’s Institute of Security and International Studies (ISIS Thailand), "Where Northeast Asia Meets Southeast Asia: The Great Powers, Global Disorder and Asia’s Future.” They were joined by ISIS Thailand Director Thitinan Pongsudhirak and Chulalongkorn University Faculty of Political Science Associate Dean for International Affairs and Graduate Studies Kasira Cheeppensook. The panel was moderated by Ms. Gwen Robinson, ISIS Thailand senior fellow and editor-at-large of the Nikkei Asian Review.

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As part of that discussion, Emmerson speculated that – driven by deepening Chinese economic and migrational involvement in Southeast Asia’s northern tier – Cambodia and Laos, less conceivably Myanmar, and still less conceivably Thailand could become incorporated de facto into an economically integrated “greater China” that could eventually reduce ASEAN to a more-or-less maritime membership in the region’s southern tier. Emmerson’s speculation was made in the context of his critique of ASEAN’s emphasis on its own “centrality” to the neglect of its lack of the proactivity that would serve as evidence of centrality and of a desire not to be rendered peripheral by the growing centrality-cum-proactivity of China. The event was covered by the Bangkok Post (although that report’s headline and quote of Emmerson are inaccurate, as neither the panel nor Emmerson predicted the “break-up of ASEAN.”)

Our delegation visit in Bangkok concluded with a buffet dinner reception and panel discussion jointly with the Stanford Club of Thailand.

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Moderated by Mr. Suthichai Yoon, a veteran journalist and founder of digital media outlet Kafedam Group, the conversation focused on the changing geopolitics of Southeast Asia, innovation and health in the region, and the opportunities and challenges facing Thailand-U.S. relations. It was a pleasure to meet many new and old friends from the Stanford and IvyPlus alumni communities.

APARC would like to thank our partners and hosts in Hanoi and Bangkok for their hospitality, collaboration, and the stimulating discussions throughout our visit. We look forward to keeping in touch!

A special section in the latest issue of the journal Asian Survey, coedited by APARC and the Korea Program Director Gi-Wook Shin, suggests a new framework in both social discourse and policy that reflects the varied complexities of Korea’s increasingly diverse migrants and that charts a course forward for a nation that is staring into a demographic abyss.

South Korea (hereafter Korea) is widely regarded as among the world’s most ethnically and linguistically homogeneous countries. In 1990, Korea counted only 49,000 foreigners amongst its population. But over the last two decades, the number of migrants in the country has grown dramatically, reaching 2.3 million (or 4.5% of the population) in 2018. Just as important is the growing diversity of migrants coming to Korea. In addition to unskilled workers and marriage migrants from developing countries, they increasingly include skilled migrant workers and marriage migrants from a range of developed Western countries.

These more recent migrant groups, however, do not fit into the dominant framework of Korean multiculturalism, and often remain invisible in Korean society, facing discrimination and largely left out of social discourse and government policy. For a nation that is aging faster than any other developed country and that struggles with weak global talent competitiveness, it is crucial to better understand the growing heterogeneity and complexity of migrants beyond their dichotomized depictions as Korean versus non-Korean in ethnicity and citizenship.

This is the focus of a special section in the July/August 2019 issue of the journal Asian Survey, titled Korea’s Migrants: From Homogeneity to Diversity. Coedited by APARC and the Korea Program Director Gi-Wook Shin and former Koret Fellow in Korean Studies Rennie J. Moon (now associate professor at Yonsei University’s Underwood International College), the special section collects articles that examine issues of class and highlight the contributions of migrants from both human and social capital perspectives, with an eye to a better appreciation of the values of diversity and transnationalism. “By doing so,” write Shin and Moon, “we aim to provide a better understanding of the varied experiences, realities, and complexities of Korea’s increasingly diverse migrant groups” and to “suggest a new framework in both social discourse and policy that reflects these complexities.” The articles in the special collections were originally presented and discussed at the Korea Program’s ninth annual Koret Workshop.

Diversity within Korea’s Migrant Groups

To capture the diversity and complexity of Korea’s migrants, Shin and Moon say, scholars need to examine within-group variation. The papers in the special section do so with respect to three migrant groups—marriage migrants, return migrants, and skilled labor—by focusing on nontraditional, relatively under-researched, highly skilled populations, mostly from developed countries, within those groups:

University of Sheffield scholar Sarah A. Son studies cross-border marriages between Korean men and Anglophone women, and shows that these Western women have very different experiences and social expectations compared with Asian female marriage migrants from developing countries. Western women bring greater perceived socioeconomic equality to the relationship by virtue of their economic position, education, and cultural background, and do not fit the common description of Asian female marriage migrants as representative of hypergamy (marrying a partner of higher social status). They also do not conform to the Korean state’s vision of social integration and resist its policy provisions to a greater degree than Asian marriage migrants. In fact, multiculturalism policy has failed to engage this Western migrant group.

What does it mean to be a skilled migrant returnee in Korea? Singapore Management University Research Fellow and former APARC Visiting Scholar Jane Yeonjae Lee provides an answer to this question by looking at the varying experiences and coping strategies of Korean returnees from New Zealand. She finds that, thanks to their educational and economic status, they fare better than traditional ethnic Korean return migrants, who experience hardships due to their status as unskilled labor. However, the process of skill transfer is not easy, and most of the skilled returnees are not fully accepted as Korean, experiencing some degree of alienation and disconnection based on their “overseas Korean” identities. In addition to greater social acceptance of skilled returnees, Lee argues, Korea needs a better policy mechanism for sustaining return migration.

Lastly, Shin, Moon, and former Koret Fellow in Korean Studies Joon Nak Choi (now an adjunct assistant professor at Hong Kong University of Science and Technology’s School of Business Management) focus on elite groups of skilled labor migrants, particularly foreign students studying in Korea and foreign professionals the country imports as skilled labor. The three authors aruge that Korea has largely failed to leverage the potential of these migrant groups, and that it must pay close attention paticularly to their human and social capital potential.

Migrants’ human capital stems from their specialized skills acquired through education, training, and work experience, which can benefit especially Korea’s small- and medium-sized firms. Their social capital is the value they can provide through their social ties that spread information and innovations and that form “transnational bridges” between Korea and their home countries. Social capital is especially advantageous for Korea’s large firms that compete in global markets.

The authors stress the need for Korea to develop a new policy framework, known as study-work framework, for cultivating social capital for skilled foreigners while in Korea. If Korea is to meet the challenges associated with its aging, depopulation, shrinking workforce, and weak position in the global war for mobile skilled talent, then it must “better appreciate the value of the cultural diversity [migrants] bring to its society and economy, as well as their human and social capital contributions.”

View the complete special section >>

Learn more about Shin’s and Moon’s related joint research project Migration, Cultural Diversity, and Tolerance >>